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The Budget Blog is transitioning. I will soon leave KHI employment, but during the upcoming election cycle I will continue to write and speak about Kansas financial matters.
Legislators just finished approving a budget for fiscal year 2015, which starts July 1, but the first order of business when they return in January likely will be to make midyear cuts to that budget. State General Fund (SGF) revenue collections are down so substantially that it now appears the state’s bank balance will be depleted in less than a year — before FY 2015 ends.
Individual income tax collections for fiscal year 2014 have declined sharply, and it’s not temporary. Kansas revenue estimators predicted income tax receipts would drop substantially, but the decrease has been much greater than forecasted.
Kansas legislators have approved a budget for fiscal year 2015 that bumps up spending $274 million from FY 2014.
The Kansas Legislature just passed a revised budget for Fiscal Year 2014 (July 1, 2013, to June 30, 2014) with approved State General Fund (SGF) spending set $103 million below the amount spent six years earlier in FY 2008. How can that be possible when the state costs for Medicaid and Kansas Public Employee Retirement System (KPERS) march ever upward?
The state’s official revenue estimate no longer appears reliable and should be redone. At the very least, the estimators ought to reconsider the individual income tax portion of the estimate so that Kansans can have an accurate picture of state finances.
A key finding in the semiannual estimate is the portion of those costs that Kansas pays in fiscal year 2014 will grow over last year, but at a slower pace than expected. However, the estimators predicted that state costs for caseloads will rise almost $90 million in FY 2015.
Estimators have revised their November forecast of the amount of income that the State General Fund will receive in fiscal year 2014 and FY 2015. The revisions are relatively small and do not significantly alter Kansas budget dynamics, but they did yield a surprising result on individual income tax.
Most state employees have been paying slightly lower premiums for their health insurance in 2014. Although price decisions have not been made for 2015, the state will likely be in a position to keep any increases in check.
The March revenue report is in. State General Fund revenue for the first nine months of fiscal year 2014 has been higher than estimated but still well below the amount collected in the last fiscal year. What does this mean for the upcoming Consensus Revenue Estimate?